Identify the errors in the notes and correct them. Specifically:

• If a wrong statement is made in a sentence, provide a correct sentence.
• If there is a wrong result of a calculation, do the calculation by yourself and provide the correct result.
• List the corrections in the order the errors appear in the notes.

Accounting adjustment: capitalising marketing expenditure

2020 2019 2018 2017 2016

Marketing expenditure ( millions) 2,573 3,042 3,001 2,724 2,410

Assumptions for capitalising marketing expenditure as an intangible asset: - Marketing spending occurs evenly throughout the year. - Only half a years amortisation is taken on the latest years spending. - Average expected life of marketing investments is 4 years. - Amortisation of the intangible asset using the straight-line method (with no residual value).

Note: Assume that the table and text above do not contain any errors.

Findings:

- Capitalising marketing expenditure results in a marketing asset of 2,573 million on 31 December 2020.

- Capitalising marketing expenditure results in a marketing amortisation expense of 2,573 million in 2020.

- Capitalising marketing expenditure increases total assets.

- Capitalising marketing expenditure results in a lower asset turnover.

- Capitalising marketing expenditure results in a lower debt-to-equity ratio.

- Capitalising marketing expenditure increases the gross profit margin.